Nigeria’s BoI gets Agusto rating upgrade to ‘Aaa’ with stable outlook

ECOBANK GROUP, the panAfrican lender, has inked an agreement with European Investment Bank (EIB) for a €100 million long-term credit facility with a nine-year tenor.

The bank said in a statement that the facility affirms the joint targeted support of the two financial institutions for business investment across the continent with particular support for the sectors that are most impacted by the COVID-19 pandemic.

This recent collaboration between Ecobank Group and the European Investment Bank to support private sector investment across Africa was formally agreed at the EU Delegation to Togo in Lomé, in the presence of Koen Doens, director-general for international cooperation and development at the European Commission, while the announcement was made during a Team Europe visit to Togo by EIB vice president, Ambroise Fayolle, Rémy Rioux, chief executive officer, Agence Française de Développement, and Koen Doens.

The agreement to the credit facility was followed up to the EIB’s signing of a €12.5 million loan to Ecobank Malawi in December 2020, to improve access to finance for SMEs in Malawi’s agricultural sector to expand, upgrade and modernise their equipment.

However, the current facility is split into three regional facilities: West & Central Africa, Eastern Africa, and Southern Africa. Funding will be provided through Ecobank affiliates, for investment projects undertaken by private sector companies.

BANK OF IN DUSTRY (BoI) Limited has seen its rating upgraded from ‘Aa’ to ‘Aaa’ with a stable outlook by leading African credit rating agency with headquarters in Nigeria, Agusto & Co.

The upgrade, according to the indigenous credit rating and research firm, is to reflect BoI’s strategic role and enhanced capabilities in implementing the Federal Government of Nigeria’s economic recovery and growth plan, as well as the country’s industrial revolution plan.

The African foremost rating agency, in a ratings newsletter made available to Business A.M. said the rating, which expires on 30 September 2022, is reflective of the financial institution’s ability to refinance which has remained strong over the years, underpinned by a sovereign guarantee provided by the Ministry of Finance Incorporated on its debt obligations. Agusto also said the rating considers the BoI’s good capitalisation, good liquidity profile and experienced management team.

In the ratings statement, Agusto said: “The rating assigned also considers the bank’s good capitalisation, good liquidity profile and experienced management team. In addition, the rating assigned is reflective of the strong support that BoI receives from its two key shareholders: the Ministry of Finance Incorporated (the investment vehicle of the Ministry of Finance) and the Central Bank of Nigeria (CBN). The bank’s ability to refinance has remained strong over the years, underpinned by a sovereign guarantee provided by the Ministry of Finance Incorporated on its debt obligations.

“As a result, in FYE 2020, BOI consummated €1 billion and another $1 billion syndicated guaranteed borrowings from a consortium of lenders, including Credit Suisse, AFREXIM, Rand Merchant Bank and SMBC Bank International Plc. Excluding equity support, the CBN also provides financing through its intervention programmes and acts as a counterparty in BOI’s foreign currency hedging contracts. However, constraining these positives is Nigeria’s slowly recovering economy following the outbreak of the COVID-19 pandemic. In addition, the bank must integrate environmental, social and governance (ESG) metrics into its loan criteria in order to appeal to the growing green investors’ community,” it stated.

Commenting on the outlook for the financial institution, the indigenous ratings agency said, “Our outlook for the bank is stable and reflects our expectations of stronger capitalisation, enhanced by retained earnings and anticipated capital injection by a significant shareholder. We also expect an uptick in profitability metrics, acceptable asset quality indicators and a good liquidity profile.”